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Euro zone economy grew a paltry 0.3% in fourth quarter

A worker welds in a factory in Gravellona Lomellina, 45km southwest of Milan, in this file photo.

STEFANO RELLANDINI/Reuters

The 19-country euro zone grew by a paltry quarterly rate of 0.3 per cent in the final three months of 2015 despite tail winds such as cheap energy, an export-boosting drop in the currency and monetary stimulus.

The growth reported Friday by the European Union's statistics agency, Eurostat, was in line with market expectations after earlier reports showed Germany, Europe's biggest economy, grew at the same rate and France, the region's number 2, expanded by 0.2 per cent.

Over the whole of 2015, the euro zone grew 1.5 per cent. Though that's the highest level since 2011, growth remains way below levels that would markedly reduce the bloc's unemployment rate, which is still above 10 per cent.

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Growth across many parts of the euro zone has been held back by a number of factors.

In Greece, controls on money such as limits on the amounts individuals can withdraw from ATMs have pushed the economy back into recession. Greece contracted by a quarterly rate of 0.6 per cent in the fourth quarter.

Italy's economy grew but barely, at a quarterly rate of 0.1 per cent. The country has become an increasing source of concern over recent weeks as its banks remain lumbered with a huge amount of bad loans that limits the ability of the financial sector to lend to the wider economy.

One bright spot was Spain, where unemployment nevertheless remains over 20 per cent. Growth in the country was 0.8 per cent.

Following the turmoil in global financial markets this year, there are worries that growth may falter this year and that's prompted renewed pressure on the European Central Bank to do more to boost the eurozone economy at its next policy meeting on March 10.

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